The European Union is preparing to roll out MiCA, a series of sweeping regulations that could severely limit the crypto industry in the region.
The European Union’s Bill on Markets in Crypto Assets (MiCA) was finalized in September. European Parliament officials voted 28 to 1 in favor of the legislation in October and it must pass one final vote.
The stock account covers everything from stablecoins to crypto mining to non-fungible tokens (NFTs) to money laundering. However, there are also clauses buried in it that could affect crypto influencers.
On November 1st, Circle’s EU Strategy and Policy Director Patrick Hansen unearthed one of these clauses. According to the small print, crypto influencers who comment on social media without disclosure could be in trouble. If they are deemed to benefit from the consequences of their actions, this will be considered market manipulation in the EU once MiCA is in force, he noted.
The big EU crypto cleanup
The terminology is vague, but it could include memes like Elon Musk’s Doge-Twit image which did the rounds. The response was mixed with some questioning why the same rules do not apply to other assets.
However, those in favor said that there should be more transparency of crypto influencers and coins.
How it will be monitored and enforced is also unclear. Nevertheless, what is clear is that the EU is about to make things much more difficult for the crypto industry and everything related to it.
Regulators are confident that this is a step forward that will make the region more attractive to the crypto industry. On November 2, MiCA rapporteur Stefan Berger said that these regulations are necessary if “Europe wants to be a major player in the crypto game.”
MiCA under the microscope
MiCA comes down hard on DeFi in the name of consumer protection. However, it can simply turn it into TradiFi, which centralizes and controls all aspects of the sector.
It also aims to regulate stablecoins and their issuance and crypto-asset service providers (CASPs). This will pave the way for fully regulated exchanges and brokers and potentially prevent fraudulent activities.
The bill introduces three subcategories of crypto-assets. This is based on the question of whether the token wants to stabilize its value in relation to other assets.
Furthermore, the consumer protection card is touted, but the real motivation behind MiCA is the prevention of money laundering. To do so, it aims to align crypto company regulations with the same framework that governs banks. MiCA is not likely to become law until 2024.
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